Bangladesh opens negotiations with the World Bank in few days for a US$500 million worth of budget support with a greater goal of economic recovery, officials said Friday.
The budget-support credit, embedded on green growth, will be the first of its kind during the post-uprising interim government headed by Prof Muhammad Yunus, they said.
"We will sit for negotiations with the WB later next week. We are hopeful of getting a good result from the next meeting," a senior Economic Relations Division (ERD) official told the FE on Thursday.
Their expectations are that the credit from the global lender would be confirmed and disbursed by December for advancing Bangladesh's green and sustainable economic growth.
The World Bank has already shown its eagerness to work with this interim government offering higher supports to different policy and structural reforms and programmes.
The assured budget support would be a second tranche of the Green and Climate-Resilient Development (GCRD) credit from the Washington-based global lender.
Earlier on April 27 last year, the Bank provided $500 million worth of credit to Bangladesh government under the 1st tranche of the GCRD Development Policy Credit (DPC) programme.
A WB official has said: "The negations will be held within this week. The loan could be confirmed and disbursed by this yearend."
A Ministry of Finance (MoF) official said the WB earlier assured of providing $250 million as budget support under the 2nd tranche of the GCRD programme.
"But we had requested the WB during the last IMF-WB Annual Meeting in Washington to double the credit amount as Bangladesh needs foreign-exchange support for its economic recovery."
He said the World Bank had given them a positive response. "We hope that all the terms and conditions will be settled in the next meeting later this week. And then the $500 million loan will be received by next month," he added, thanking the WB authorities for the overtures.
Meanwhile, the government is also working to get more budget support from the global lender to give a fillip to the economic-recovery programmes as the country's foreign-exchange reserves came down to some $20 billion in recent months from a high of $47 billion two years ago.
Experts say massive money laundering and bill payments to the costly private-sector power plants for purchasing electricity had affected the country's foreign reserves.
The 1st GCRED DPC was a result-based policy loan where the WB tagged some conditions.
Among the dos, the government has to ensure 7.0-percent bids in public procurement to come from women-owned businesses, approximately 5.0-percent reduction in households using solid fuels as primary cooking fuel, 67-percent reduction in public expenditure in fuel subsidies for diesel, heavy fuel oil (HSFO) and octane, 1000 GWh of cumulative energy savings from the DPC-supported energy-efficiency policies, reduction in liquid fuel (HSD and HSFO) used annually for power generation (1.67 million tonnes), and 30 new municipalities with water-tariff models.
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